- BlackRock filed for its iShares Bitcoin Managed Protection ETF (PBIT), using options and fixed-income assets to offer Bitcoin exposure with limited downside protection.
- PBIT aims to cushion substantial Bitcoin losses while capping potential gains, although investors could still lose their entire investment.
- US spot Bitcoin ETFs attracted US$526.7 million in net inflows on Monday, led by BlackRock’s IBIT with US$665.2 million.
- Strategy increased its holdings to 848,517 BTC, while Strive acquired another 4,045 BTC, lifting its treasury to 36,818 BTC.
BlackRock is ramping up its Bitcoin ETF lineup. Following the launch of the iShares Bitcoin Premium Income ETF (BITA), it has now filed with the US Securities and Exchange Commission (SEC) for a fund called iShares Bitcoin Managed Protection ETF (PBIT).
PBIT won’t buy Bitcoin directly or hold IBIT, the world’s largest Bitcoin ETF. The idea is to buy and sell options linked to IBIT or similar assets and hold fixed-income investments to provide investors with Bitcoin exposure plus downside protection.
However, the downside protection isn’t guaranteed, and investors could still lose their entire investment.
Where BITA sells call options primarily to generate income, PBIT instead uses options to structure a range of potential returns, while placing an approximate ceiling on the gains investors can capture.
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IBIT first traded on Nasdaq in January 2024 and has amassed over 800,000 BTC worth around US$65 billion (AU$93 billion).
Big Splash Coming as ETF Flows Reverse?
The US spot Bitcoin ETFs saw a resurgence in inflows on Monday. After a poor two weeks with almost US$1 billion in net outflows, Monday saw a combined US$526.7 million (AU$754.2 million) in net inflows. Considering that Fidelity’s FBTC and Grayscale’s GBTC saw US$83.6 million (AU$119.7 million) and US$54.9 million (AU$78.6 million) in net outflows respectively, IBIT’s performance looks even stronger.
Monday saw US$665.2 million (AU$952.5 million) in net inflows for the largest Bitcoin ETF.
Bloomberg analyst James Seyffart noted that BlackRock has only delved into Bitcoin and Ethereum products, while other firms have also issued ETFs giving exposure to Solana, XRP and other altcoins.
Seyffart also noted that the concept behind PBIT is nothing new. He pointed to “defined outcome/buffered Bitcoin ETFs from Calamos, First Trust and Innovator”, but also stressed that because it’s BlackRock, it “tends to make a big splash”.
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Treasuries Load Up on BTC
At the same time, Bitcoin whales Strategy and Strive have expanded their treasuries. Michael Saylor’s firm bought 267 BTC as per the latest report from Monday. The pile has increased to 848,517 Bitcoin, worth US$69.5 billion (AU$99.5 billion) at today’s prices.
Strive on the other hand splurged big and loaded up on 4,045 Bitcoin, as a recent SEC filing shows. The purchases were made between 12 and 16 October. Strive now holds 36,818 BTC and has moved into fourth spot among the top treasury holders, overtaking MARA Holdings.
At the time of writing, Bitcoin trades at US$81,951 (AU$117,373), down almost 2% over the past week. BTC briefly made it up to US$83,014 (AU$118,885) Monday afternoon Australian time, but has since declined.
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